JD.COM INC-ADR (NASDAQ:JD) – An Undervalued Stock Worth Considering

JD.COM INC-ADR (NASDAQ:JD) was identified by our stock screener as a decent value stock. The company shows solid fundamentals, with a strong valuation score, reasonable profitability, and steady growth, making it an interesting candidate for value investors.

Valuation

JD’s valuation metrics stand out, with a Price/Earnings (P/E) ratio of 5.82, significantly lower than both the industry average (27.61) and the S&P 500 (24.85). The Price/Forward Earnings ratio of 6.89 also indicates an attractive valuation, cheaper than 90% of its peers in the broadline retail sector. Additionally, the Enterprise Value to EBITDA ratio suggests JD is undervalued compared to the entire industry.

Profitability

The company maintains a Profit Margin of 3.57%, outperforming 67% of its competitors. Its Return on Equity (17.28%) and Return on Assets (5.92%) are above industry averages, indicating efficient use of capital. While the Gross Margin (15.87%) is below peers, it has been improving over recent years.

Financial Health

JD’s financial health is stable, with a Debt-to-Equity ratio of 0.24, reflecting a balanced capital structure. The Altman-Z score of 2.67 suggests limited bankruptcy risk, and the Debt-to-Free Cash Flow ratio (1.23) is strong, meaning JD could repay its debt quickly if needed. However, liquidity metrics like the Quick Ratio (0.99) indicate some short-term obligations may require monitoring.

Growth

JD has demonstrated strong Earnings Per Share (EPS) growth (82.85% YoY), with a projected annual growth rate of 26.49% in the coming years. Revenue growth has been steady at 14.97% annually, though future expectations are more modest at 4.89%.

Our Decent Value Stocks screener lists more stocks with similar characteristics and is updated daily.
For a deeper look, review the full fundamental report on JD.

Disclaimer

This is not investing advice! The article highlights observations at the time of writing, but you should always conduct your own analysis before making investment decisions.